Group Outlook industrial survey: The bad news, and the good news
By Staff -- Manufacturing Business Technology, 9/1/2008 12:00:00 AM MDT
Prime Advantage, a Chicago-based buying consortium for midsize industrial manufacturers, says findings of its Group Outlook Survey for the second half of 2008 once again place raw materials—including stainless steel, nickel, copper and other metals and plastics—and energy costs at the top the concerns list, especially among North American manufacturers.
Since its inception, Prime Advantage says it has returned more than $60 million in rebates and discounts to its members. The savings help U.S. manufacturers gain a powerful competitive advantage in the face of out-of-control commodity costs.
The second half of the consortium's Group Outlook Survey follows as an update to the first survey conducted in January 2008, whereby members were asked to predict their expected cost pressures for 2008. It polled 72 senior-level representatives of industrial manufacturing companies, including business owners, VPs of procurement, and purchasing directors.
More pressure points
“Other indicators—such as the Institute for Supply Management's June 2008 Manufacturing ISM Report On Business [http://www.ism.ws/ISMReport/MfgROB.cfm]—confirm that rising commodity prices, combined with a fluctuating Purchasing Managers Index, are putting great pressure on U.S. manufacturers,” says Louise O'Sullivan, president of Prime Advantage. “Pricing pressures for raw materials and commodities will continue to be an obstacle to success for many North American manufacturers,” she adds.
The survey finds 51 percent of respondents have shifted the top sourcing priority to “identifying reliable and cost-efficient sources for raw materials” rather than “improving efficiency measurements.”
|
| The second half of the Prime Advantage Group Outlook Survey follows as an update to a January 2008 poll, whereby members were asked to predict expected cost pressures for 2008. |
A higher percentage of respondents now expect capital spending to decrease or stay the same as the first half of 2008, while 39 percent of Prime Advantage members expect capital spending to decrease in the next six months, and 42 percent expect capital spending to remain unchanged. Previously, members predicted no change from 2007 (52 percent) or an increase (36 percent) from 2007 in capital spending.
Now the good news
Recently, the U.S Department of Labor, Bureau of Labor Statistics released a report stating that 541 mass layoff events resulting in 76,514 initial claims for unemployment insurance were reported in the manufacturing sector in June 2008. This is said to be the highest monthly levels since August 2003.
Contrary to this report, for the North American midsize manufacturing sector, optimism with job security remains.
The latest Prime Advantage survey shows confidence surrounding job security and employment opportunities in the second half of 2008. While only 17 percent expect job cuts within the next six months, another 17 percent expect job growth, and 66 percent expect to make no changes and keep their current employee base at the same level.
“U.S. manufacturers are cautiously optimistic about the rest of the year, in spite of current economic concerns,” O'Sullivan says. “Through the collective buying power of Prime Advantage, our members are still hopeful.”
Featured Company
Most Recent Resources
- From CAD Systems to Customers - New collaboration capabilities bring...
- Real Time Energy Management - FREE White Paper and Video
- Deployed in 45 days, Zebra Enterprise Solutions Material Flow System...
- How to Eliminate 7 Wastes from your Supply Chain with Real-Time...
- Is Your Website Really Winning You Business
